Public housing home cost $297K to build

Tuesday

Sep 3, 2013 at 12:01 AMSep 3, 2013 at 3:14 AM

The Stark Metropolitan Housing Authority spent $297,000 to build a single-floor house, without a basement — on a postage-stamp-sized lot; within an eroding neighborhood; inside an under-performing school district; and surrounded by existing houses valued in the $50,000 range.

Tim Botos

Editor’s note: This is the first in a intermittent series by Repository writer Tim Botos looking into the Stark Metropolitan Housing Authority, accused in a federal audit of improperly spending or failing to document more $10.5 million of its public-housing dollars.

The Stark Metropolitan Housing Authority obliterated most cardinal rules of real estate when it completed a new home this year in the city’s near northwest area.

The agency spent $297,000 to build a single-floor house, without a basement — on a postage-stamp-sized lot; within an eroding neighborhood; inside an under-performing school district; and surrounded by existing houses valued in the $50,000 range.

That tile-floored, brown-sided house with white trim at 820 Fulton Road NW is merely one in an avalanche of problems Hill inherited when hired as the agency’s director in late February.

The big picture is that SMHA wrongly spent $10.5 million in federal funds in the past decade, according to an audit conducted by the U.S. Department of Housing and Urban Development Office of Inspector General. Some of the money funded projects that didn’t provide public housing; some was spent without required HUD approval or documentation, according to the audit, which was released in July.

It’s unclear if any findings will cross the line into criminal acts — Hill said he doesn’t know that answer and a HUD spokesman did not respond with a comment for this story.

For now, SMHA has been advised to pay itself back the $10.5 million. That means taking revenue from its non-public housing projects, and funneling it into the agency’s federal accounts until the debt is paid.

Since taking over, Hill fired SMHA’s top two finance employees. He’s also in the process of dumping several service contracts and hiring employees to do the work instead.

“We’re trying to change the culture here,” Hill explained.

As far as that house on Fulton — he’d take a do-over if he could.

ALTERNATIVES

According to city records, it’s the third most expensive house built in Canton during the past three years. Only one on Vernon Avenue NW and another at Quarry Golf Club cost more.

The Fulton neighborhood is sprinkled with rentals. Its once stately houses are valued at only a fraction of what SMHA paid to build the new one. For example, a four-bedroom, one-bathroom a few blocks away is on the market for $35,000.

And here’s a sampling of area houses now listed for roughly what SMHA spent on the new one:

The 43-by-125-foot lot on Fulton had been vacant since a fatal fire in 2009 destroyed the SMHA house that had occupied the spot. HUD had notified SMHA it needed to do something to restore the lost four-bedroom unit to its stock. But not everyone at SMHA was on board — at least with the cost.

Plans by the agency’s contracted architect, John Picard, called for a handicap-accessible, 2,137 square-foot, five-bedroom, two-and-a-half bath with a single-car attached garage, estimated at $300,000.

The house later was scaled back to four bedrooms.

A review of hundreds of pages of agency documents and internal and external emails indicates that at least some believed $300,000 to build a house in that neighborhood was too much. In February of 2012, SMHA even postponed bid openings on the project until further notice because of unspecified “issues.”

One employee suggested the bidding process should begin from scratch again, if the project moved forward at all. It’s unclear what occurred in the interim, but then-Executive Director Mike Williams decided to go forward on the house, moving the bid opening to April 23.

Williams, who retired in December, declined to be interviewed for the story.

NUTS AND BOLTS

Smith Homes, of Jackson Township, bid $206,000 on the house itself, much less than second bidder, Pachan Construction’s $264,000. Contracts for plumbing, HVAC and electrical work were bid and awarded separately.

By the time the house was completed this year, all the contracts tallied up to a final cost of $297,000. HUD officials were curious. In May, they’d asked SMHA to supply copies of all documents related to the house.

Smith ultimately completed the job on time and under budget by about $14,000. Company President Steve Smith, who’s been in the home-building business for more than 40 years, said he’s proud of the result.

“A lot of work went into that home,” he said.

Building a handicap-accessible home is more expensive, he said. The interior, including all-tiled floors, and an exterior, with vinyl accessories, was built to require little maintenance. And since it was a HUD project, everyone who worked the job was paid prevailing wage, which also can drive up costs.

“The insulation ... roof, energy efficient lights, furnace, cooling, all of those will be savings down the road,” Smith explained. “From a construction view, it was built to be a 100-year home.”

Hill, the new SMHA director, said it was a bad decision. He said the agency should have pursued other options. Hill said they could have asked HUD for permission to build elsewhere or renovate another house in the area for the $107,000 it had collected in insurance following the fire.

Twenty-five-year-old Tina Kirk, a mother of four children, ages 1 to 8, moved into the new house in April. She said she was excited at first to get out of project housing at Jackson-Sherrick.

Kirk said she’s disabled, due to a degenerative condition known as Charcot arthropathy, though she doesn’t require a wheelchair.

“But this neighborhood is so bad,” she said. “It’s like y’all moved me from one hood into another hood. I grew up in the hood, but I’m trying to do better for my children. I don’t want them growing up here.”